January 22, 2018

FRC moves to develop new National Code of Corporate Governance

FRC moves to develop new National Code  of Corporate Governance

By Babajide Komolafe

THE Financial Reporting Council of Nigeria has commenced measures to develop a new National Code of Corporate Governance.

This is coming one year after the suspension of the first National Code of Corporate Governance which was enmeshed in controversy.

To this end the board of the Council has inaugurated a technical committee to review and re-issue the national code.

Speaking at the inauguration of the committee in Lagos yesterday, the Chairman of the Governing Board of the FRC, Mr Adedotun Sulaiman said the review of the code is to address the several issues that arose from the previous code released in October 2016.

Suleiman the committee is expected to come up with a National Code for corporates that is aligned with sectoral codes before the end of the first quarter of 2018.

He noted that the major difference from the previous code would be the active involvement of stakeholders in the formulation of the code as well as the consideration of the peculiarities of the local business terrain in relation with global best practises.

Speaking further, Suleiman said: “We will seize the opportunity of the impending exercise to harmonise and streamline the various sectoral codes on corporate governance currently in existence in the country.

“While the absence of a National Code of Corporate Governance provided the vacuum which industry regulators sought to fill within their respective spheres of regulatory purview we will use the introduction of a revised national code to provide a fulcrum around which different industry or sector regulators can align their efforts to introduce, promote and entrench high standards of corporate governance practices in their respective sectors.”

Ahmad said the review will focus on sectors that contribute largely to the economy. Chairman of the  FRC Governing Board, Sulaiman on his part said the board expects the draft code for corporate governance  to be out before the end of the first quarter while the code for public sector and non profit organisation are expected to follow.

According to him, the code for corporates takes precedence because of the impact it is expected to have on the economy of the country. Also to be considered, he said is the conflicts between the sectoral and national code, adding that the decision on which code should take precedence will be arrived at by the  committee as well as if the code should be mandatory, prescriptive or comply or explain.